AbbVie Inc is known for its blockbuster arthritis drug Humira. However, while Humira has brought in plenty of cash for the company as compared to other AbbVie products, the scenario is now changing. Sales for Humira have been gradually falling and the market share has also witnessed a downturn. The company has faced stiff competition from other biosimilar companies, particularly in the non-US market. Additionally, Humira’s market exclusivity comes to an end in 2023.
However, recent AbbVie news has been quite interesting. The company recently announced the $63 billion acquisition of an Irish-based pharma company Allergan. Recently, it cleared all legal and regulatory hurdles to complete the deal. Allergan is best-recognized as the maker of Botox. It also has a strong portfolio of products in areas like eye care, medical aesthetics, central nervous system, and gastroenterology.
From a strategic point-of-view, the AbbVie Allergan deal gives AbbVie a boost to its already extensive product portfolio. AbbVie’s oncology and immunology portfolio will get complemented with Allergan’s portfolio in ophthalmology, neurology, women’s health, and gastroenterology. Allergan’s presence in the neuroscience and aesthetics segments through brands like Botox, Juvederm, Vraylar, and Ubrelvy provides new growth avenues for AbbVie.
According to Richard A. Gonzalez, CEO, AbbVie Inc, “This is a transformational transaction for both companies and achieves unique and complementary strategic objectives.” He further added, “This strategy allows us to diversify AbbVie’s business while sustaining our focus on innovative science and the advancement of our industry-leading pipeline well into the future.”
AbbVie stock closed at $90.89 on 3rd June 2020, up about 38% since the acquisition was first announced back in June 2019. The stock also currently offers a dividend yield of more than 5%.